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Special Update #20


This SPECIAL UPDATE includes three articles that you need to read.  Don't read them until you have some time to then think about them and their implications.  The first two articles are from STRATFOR.COM which is one of the world's leading private providers of global intelligence and geopolitical analysis. I believe these two articles are critically important in understanding the terrorist threat we may be facing, and why President Bush is dead serious in his repeated warnings to those who aid and abet terrorists in any way.

The third article is from DEBKA.COM, another international investigative reporting service.  This article discusses Vice President Cheney's tough talk with the Saudis on his recent 11-nation trip, and just how delicate and dangerous the situation is in the Mid-East.

I offer no commentary or analysis on these articles . . . yet.  You read the articles.  I'll come back with my thoughts and analysis from others next week. 

The following articles are quoted in their entirety.


"The Cheney Tour: A Confrontation of Fears

18 March 2002


U.S. Vice President Dick Cheney's trip to the Middle East is in response to two fears. One is the American fear that al Qaeda will eventually acquire nuclear weapons and destroy American cities. The other is a fear in the Middle East, and indeed globally, that the United States, in the course of defending itself against this threat, will completely overturn the international system and impose upon the world an American empire. Both fears are reasonable.


Sept. 11 was a terrible day for the United States, but it did not threaten the very fabric of American society. Fifty September 11ths would not do that. But were al Qaeda to acquire nuclear, biological or chemical weapons and the ability to use them effectively, then that social fabric could indeed be threatened. In his various taped messages, Osama bin Laden warned of a cataclysm facing the United States. There is no question that bin Laden wants to destroy the United States, and there is no question that he is a capable man with a capable organization. So the threat cannot be dismissed. There appears to be sufficient evidence in the hands of U.S. intelligence about al Qaeda's attempts to secure nuclear weapons to create this situation:

1. The United States knows that al Qaeda wants to destroy it.

2. The obvious means to attain this end is to use nuclear and other weapons of mass destruction.

3. The U.S. knows that al Qaeda has tried to obtain such weapons.

4. It cannot be ruled out that al Qaeda has already obtained nuclear weapons. While we cannot know for sure that they have them now, it is almost certain that al Qaeda will continue trying to obtain these weapons.

5. If at all possible, they will use them.

If al Qaeda already has these weapons, it is imperative that the United States obliterate al Qaeda as quickly as possible. Ideally, U.S. intelligence would know for certain whether such weapons have been obtained and where they are located. However, the United States must assume that it has, at best, incomplete data. Therefore, even if it knows the current location of al Qaeda weapons, it understands destroying that particular set of weapons would not destroy all of them.

The United States must also assume that if these weapons were in the United States already, they would have been used by now. The threat of compromise and capture of such valuable assets would force al Qaeda to use them as quickly as possible. It follows that if al Qaeda has obtained significant nuclear, biological or chemical weapons, they are located where al Qaeda operatives are working. Most likely they are in the process of being moved into the United States and are in transit at some point in the complex international structure.

The first step in assuring U.S. national security is to disrupt of al Qaeda's ability to move the weapons from country to country. That means that the United States must:

1. Destroy as many parts of the al Qaeda network as possible.

2. Destroy these parts as soon as possible.

3. Strike at these parts as close to simultaneously as possible in order to prevent rapid regeneration.

Although this process may not ultimately destroy al Qaeda, it will either destroy whatever weapons of mass destruction exist in its control or at least lock those weapons in place due to the loss of a secure transport network.

The United States does not have a perfect picture of the location and movements of al Qaeda globally, but we can assume it has achieved, in the past six months, a picture of al Qaeda that is orders of magnitude superior to the level of knowledge it had Sept. 11. Ideally, the United States would know where every cell is located, but for practical purposes it is sufficient to have identified a majority of the critical nodes in order to disrupt the system and freeze any nuclear devices in place.

In order to achieve this overriding goal, the United States must be able to strike deeply into sovereign countries. Al Qaeda exists, according to U.S. President George W. Bush, in more than 60 countries in the world. Because there are multiple paths that such weapons can take in their movement to the United States, the United States will have to conduct overt and covert operations in virtually all of these countries. It will have to do so quickly and simultaneously. And it will have to do it whether or not it has the permission of the host countries.

U.S. Vice President Dick Cheney's current trip certainly concerns Iraq. Ultimately, both the sources of weapons of mass destruction and any currently deployed weapons will have to be dealt with. However, it is clear Cheney is asking for more than permission to strike at Iraq. He is also asking for cooperation in destroying al Qaeda networks embedded deep in the region's societies. He is making it clear that if the various countries do not cooperate to U.S. specifications, the United States will act unilaterally. Thus, if a Middle Eastern country cannot provide the United States with a high degree of confidence that it is liquidating al Qaeda operatives by itself, Cheney is making it clear that the United States will be forced to deal with the matter itself. In short, U.S. covert operations -- and even overt -- will extend into countries that do not deal with al Qaeda to U.S. satisfaction.

Cheney is arguing with as much earnestness as he can muster that this is not an attempt by the United States to usurp the sovereignty of countries like Saudi Arabia. Rather, it is a desperate attempt by a very frightened United States to deal with a menace that can kill hundreds of thousands -- or even more -- Americans. Cheney is undoubtedly acknowledging the weakness of U.S. intelligence on the specific threat, but he is also arguing that the magnitude of the consequences of failure would be so extraordinary that the United States cannot afford a more limited response. In short, Cheney is arguing that the U.S. response is in fact proportional to the threat.

He is also making a more difficult argument. Al Qaeda as an organization is deeply embedded in many Islamic countries where it has substantial sympathy. Cheney is arguing that U.S. demands for cooperation and access represent a special case. The countries he is visiting, like Saudi Arabia, understand that the elimination of al Qaeda to American specification is impossible to achieve -- certainly in a single brilliant strike. If the Americans are serious about al Qaeda, it will mean an ongoing U.S. presence and intervention in their own social fabric. In order to protect the American social fabric, the United States will wind up with oversight, if not control, over other societies.

The fear that is stalking the Middle East -- and Europe as well -- is that the American war against al Qaeda will institutionalize the American empire. The United States emerged from the Cold War as the world's only superpower. It could have imposed a global hegemony, but it had neither the appetite nor the interest in doing so. Instead, it engaged in a series of fairly random interventions around the world. This irritated many but frightened few.

The threat from al Qaeda has generated an American appetite and interest in imperial control. The internal workings of Pakistani or Saudi or Indonesian ministries and intelligence services is now a matter of extreme national interest to the United States, and it is prepared to exert its power in order to get those entities to operate in a manner that coheres with American interests. Even more important, the United States is now deeply interested in what takes place within these societies and intends to intervene as necessary. More than during the Cold War, and now extending globally, the United States expects sovereign countries to allow it access and control over their internal affairs.

The belief in much of the world, and certainly in the Middle East, is that the United States is simultaneously irresistible and intolerable. They do not believe that the United States will ever pull back from its covert and overt interventions. These states completely believe Dick Cheney when he describes the depths of American fears of al Qaeda. The problem is that they do believe him. They also believe that the American confrontation with al Qaeda or its successor organizations will not end with the crystal clarity that the Administration is hoping for. No matter how perfectly executed the special operations attacks on al Qaeda cells are, how accurately U.S. air strikes -- some using nuclear weapons -- are in destroying dangerous WMD facilities, no matter how quickly Saddam can be toppled, the United States will not be able to put closure on its confrontation with Islam.

Without that closure the United States will not be able to relinquish its oversight and control of parts of governments in the Islamic world and elsewhere. This will lead to one of two things. The United States will be so effective that the morale of the Islamic world will be shattered and the regimes that cooperated will become colonial puppets of the United States. Or, alternatively, the strikes will result in a massive upsurge in anti-Americanism in the Islamic world, and regimes that cooperated with the United States will be swept away.

The fear in America is of nuclear weapons. The United States has no interest in empire, per se. However, the pursuit of al Qaeda results in an imperial situation regardless of the intent. The rest of the world may have no interest in protecting al Qaeda, but the price of calming American fears will result in an American imperium, regardless of intent. This issue is most salient in the Middle East and in the rest of the Islamic world. It is, however, only somewhat less salient in Russia, China and even among U.S. allies in Europe. All of them see the relentless pursuit of al Qaeda as opening the door to a degree of imperial hegemony by the United States that could become intolerable to them.

The Iraq issue is merely a minor part of the puzzle. From the standpoint of its neighbors, Iraq has become a tolerable, manageable problem. The United States is now prepared to redesign the region in its pursuit of al Qaeda, but Iraq's neighbors are not eager for that redesign. The real, underlying issue is that the United States wants to redesign the internal operations of every state and society in which al Qaeda is operating -- and to review progress as it happens.

The United States is not doing this because it wants an empire. It is genuinely fearful of al Qaeda, and with good reason. The resistance comes not from nations that want the United States nuked by al Qaeda. It comes from nations that are afraid that surrendering part of their sovereignty in the war against al Qaeda will result in the permanent loss of sovereignty. And these are reasonable fears.

Ultimately, the United States is overwhelmingly powerful and in most state-to-state relations either irresistible or a force to be reckoned with. It will get more cooperation than not, and where it does not get cooperation, it will strike anyway. Empires are born out of material such as this. They arise almost accidentally as nations seek to calm their deepest fears."  


"Crisis Looms Between U.S., Russia

20 March 2002


CIA Director George Tenet recently singled out Russia as a massive contributor to the spread of chemical, biological and nuclear weapons. Despite the cooperation Moscow has given to Washington's anti-terrorism campaign, the Bush administration is putting the Russian government on notice. A severe crisis between the two sides may now be forming.


While speaking to the U.S. Senate Armed Services Committee March 19, CIA Director George Tenet singled out Russia as "the first choice of proliferant states seeking the most advanced technology and training" for weapons of mass destruction, Agence France-Presse reported. Tenet added that Russian sales of technology and expertise applicable to chemical, biological and nuclear weapons were "a major source of funds for commercial and defense industries and military research and development."

Tenet's statement -- coming in the wake of a recent Pentagon report naming seven countries, including Russia, as potential nuclear targets -- was a bombshell. It places responsibility for the spread of Russian weapons of mass destruction squarely on the shoulders of the government in Moscow and sets the stage for a coming confrontation with Russian President Vladimir Putin.

STRATFOR has previously said that a new doctrine is emerging within the Bush administration that is based on the following logic: Al Qaeda is not dead and is dedicated to further attacks on the United States. It has demonstrated the desire to obtain chemical, biological or nuclear weapons, which represent a threat to millions of American citizens.

The United States must therefore both destroy al Qaeda and eliminate any stockpiles of chemical, biological or nuclear weapons that could find their way into the group's hands. The fact that most of these stockpiles belong to sovereign nations like Syria, Pakistan and Russia complicates the problem for Washington but does not change the Bush administration's policy.

If anything, ending the proliferation of weapons of mass destruction (WMD) actually takes priority over destroying the al Qaeda network. Terrorist networks can be badly hurt, but it is incredibly difficult to destroy them completely. WMD stockpiles, plus the accompanying facilities and skilled personnel, are finite and are harder to regenerate than a terrorist network.

Now the director of the CIA has named Russia as the key source of WMD proliferation. Tenet stopped just short of explicitly placing the blame on the Russian government, but at the same time, he also did not blame rogue elements in the Russian security services or mafia syndicates. This would have given Putin a certain amount of deniability and raised the potential for Russia to work with the United States -- like it did in the early 1990s -- on decommissioning weapons of mass destruction.

Instead, Tenet delivered a blunt message to Putin: the United States believes that WMD proliferation is official Russian policy. The government in Moscow must either immediately halt this policy or face the consequences.

Gone is any residual U.S. gratitude for Russian cooperation during the early phases of the war in Afghanistan. The Bush administration is maintaining that the threat posed to the United States is so great that any and all other considerations -- including diplomatic niceties -- must take a backseat.

This represents the beginning of a severe crisis between the United States and Russia. Putin must weigh his choices very carefully. If he accepts U.S. demands and subordinates Russian foreign policy to Washington again, he acknowledges that his country has effectively become subservient to the United States. This not only would be a bitter pill to swallow but also would feed nationalist political and military elements within Russia that currently challenge Putin's agenda. The president has managed these groups so far, but a gesture of appeasement on this scale would inflame the passions of even the most pro-Western Russians.

However, if Putin does not accept U.S. demands, he faces the distinct possibility of attacks on Russian weapons facilities and the potential elimination of his country's nuclear capability. Such an outcome could very easily spark a coup in Russia, which Putin would probably not survive. Even if he did manage to stay in power, Putin's plan to rebuild Russia through economic integration with Europe and closer short-term ties to the United States would be destroyed. And in the worst-case -- but still quite likely -- scenario, Russia would respond by launching a nuclear attack on the United States.

We are not yet at the point of crisis. The Bush administration went public in order to put more pressure on Putin, likely after getting few results from private consultations. Putin is in the process of feeling out American resolve. He knows that Washington has the means to carry out its threat; Putin is now trying to figure out if it has the will." 


"Cheney's blunt words with Saudis Support attack on Iraq or else, says vice president

Posted: March 22, 2002

1:00 a.m. Eastern

Vice President Dick Cheney and Saudi Crown Prince Abdullah did not mince words when they met in Jeddah, according to the intelligence sources of DEBKA-Net-Weekly.

Their conversation, according to the service, was neither polite nor particularly friendly -- but it was of cardinal importance for the Bush administration's next moves in its global war against terrorism.

The two leaders crossed swords, as DEBKA-Net-Weekly's sources report, over Cheney's attempts to draw the Saudi ruler into lining up with America's strategy for the Middle East and the Gulf. Abdullah spelled out the dangers he believes the kingdom and the monarchy would incur by toeing the political and military line the United States has drawn in the sands of the region. Cheney retorted that Saudi opposition would have dire consequences for both the House of Saud and the kingdom's future.

Word of Cheney's tough tone left the princes, kings, presidents and prime ministers of the region stunned. Until that moment, they had taken Bush's declaration -- that those who are not with us are against us -- as a phrase that left them plenty of room for maneuver. Confronted with the vice president, sources said, they suddenly realized Bush meant his warning quite literally.

According to DEBKA-Net-Weekly's sources in the Gulf, Cheney issued a series of ultimatums to Abdullah and demanded straight answers.

He put the desert kingdom on notice to line up with the United States' war against Iraq and abandon its undercover political and economic relations with Saddam Hussein and the ayatollahs, or Washington would not think twice about placing the Saudi kingdom into isolation both in the Middle East and the Persian Gulf.

America would also withdraw its 60-year-old guarantee to secure the reigning House of Saud.

The Saudi government moreover was told to start an immediate crackdown on all the elements in the realm aiding and succoring al-Qaida and Osama bin Laden, in one way or another. Failing Saudi action, the United States was prepared to go after those elements itself, even if this meant arbitrarily interfering in Saudi internal affairs.

Piling on the pressure, DEBKA-Net-Weekly's sources say Cheney laid before Abdullah intelligence evidence of the undercover machinations of several princes, who were secretly pouring rivers of cash into al-Qaida coffers, financing the fugitive group and its command center's relocation from Afghanistan to Gulf and Middle East bases, and footing the bill for establishing its operatives in new locales.

Cheney demanded an explanation of the rumors reaching Washington of Saudi tycoons and princes lobbying Arab financial bodies to close their accounts in American banks, lest the U.S. government claim that their money supported terrorists and impound it. Cheney cited a recent financial meeting in Beirut, organized by Saudi businessmen connected to Lebanese Prime Minister Rafiq Hariri, at which participants were quietly tipped off to move their assets out of the United States to banks in the Arab world.

The vice president also filled the Saudi de facto monarch in on America's blueprint for the Middle East's future. That future would start unfolding when the offensive against Baghdad was underway. He spoke chiefly of the new formulae for solving the Kurdish and Palestinian problems.

After wielding his stick, Cheney offered Abdullah a carrot -- the option of continuing Saudi Arabia's historic cooperation with the United States and being welcomed at the U.S. president's private ranch in Crawford, Texas, in mid-April."

Analysis and commentary to follow in the next SPECIAL UPDATE.

Have a great weekend,

Gary Halbert

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Forecasts & Trends E-Letter is published by Halbert Wealth Management, Inc. Gary D. Halbert is the president and CEO of Halbert Wealth Management, Inc. and is the editor of this publication. Information contained herein is taken from sources believed to be reliable but cannot be guaranteed as to its accuracy. Opinions and recommendations herein generally reflect the judgement of Gary D. Halbert (or another named author) and may change at any time without written notice. Market opinions contained herein are intended as general observations and are not intended as specific investment advice. Readers are urged to check with their investment counselors before making any investment decisions. This electronic newsletter does not constitute an offer of sale of any securities. Gary D. Halbert, Halbert Wealth Management, Inc., and its affiliated companies, its officers, directors and/or employees may or may not have investments in markets or programs mentioned herein. Past results are not necessarily indicative of future results. Reprinting for family or friends is allowed with proper credit. However, republishing (written or electronically) in its entirety or through the use of extensive quotes is prohibited without prior written consent.

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